Every dollar increase in the price of oil translates into roughly an extra $1bn in revenue to the Russian economy. President Putin must be a happy man. After being re-elected by a massive majority just last year, the common impression is that here is the sensible pragmatist who has steadied Yeltsin's turbulent boat in the storm of post-Soviet democracy. He is reinstituting a little Soviet-style censorship and putting a few of his former KGB friends in positions of influence, but that is a small price to pay for an ally in the new global war on terror. At least Russia is stable and in the "freedom-loving" fold.

That is not the picture painted by these two very different but complementary accounts of contemporary Russia. They form a terrifying picture of a great country in the grip of a social and moral cataclysm. For most people, democracy has simply not delivered. These books should alarm everyone, particularly since western Europe is increasingly dependent on supplies of Russian oil and gas. Moscow has had little compunction in using gas supplies to control its various former Soviet neighbours.

Anna Politkovskaya is a heroic journalist. She recently hit the news during the Beslan tragedy when she claimed that she had been poisoned by the FSB secret police (the contemporary version of the KGB). She said they were preventing her contacting the Chechen leaders who were thought to be behind the operation. For years now she has consistently fought to reveal what has been going on in Chechnya, inside the army and elsewhere in the new Russia. Perhaps the most disturbing aspect of this collection is that it feels like a Soviet-era dissident's book. Her pieces have that slightly desperate pitch of someone who fears no one is listening - that her own people have given up and that the outside world does not want to hear, or worse, does not care.

This impression is heightened when Politkovskaya tells us that one of her subjects allowed her story about business success, corruption and politics to be told only in the west. "Go ahead let them know what our money smells of." Both author and subject know that it is dangerous to speak the truth in Russia.

Politkovskaya's basic position is that the Chechen wars have corrupted the Russian state. She has painful stories of unpunished behaviour and the Russian army's inhumanity to its own soldiers and their grieving parents. The stories confirm that little has changed from Soviet times in the new Russia's attitude to its citizens. The treatment of the relatives and victims of the Moscow Theatre siege last year, after the rescue went wrong, is testament to a state that still does not understand who it is there for.

For old Soviet specialists, there is the surreal re-emergence of the Serbski institute of psychiatry and Dr Pechernikova. She was notorious for putting away anti-Soviet dissidents in the 1960s and 1970s for "schizophrenia"; in other words, being mad enough to question the regime. Thirty years later she pops up, again doing her duty for the authorities by examining an army officer accused of the rape and murder of a 15-year-old Chechen girl. To the public delight of the military hierarchy, he was diagnosed by the good doctor as having had "a temporary mental breakdown" that night. These are fine pieces of journalism written under very dangerous conditions. The details of the trial of the Chechen Islam Hasuhavov, and the transcripts of the evidence acquired, read like something from a 1930s Soviet show trial. He was accused of "planning... to hijack a nuclear submarine, gain possession of a nuclear warhead, seize the deputies of the State Duma as hostages, demand changes to the constitutional system". Held in unofficial prisons, he was tortured and administered psychotropic drugs. I suppose it is a bit more difficult for us in the free world to get on our high horses about that sort of thing these days.

But this is not simply a book about the Chechen disaster. The detailed account of how Pavel Fedulev, former petty crook, became "the leading industrialist and deputy of the legislature" of the vital industrial region around Yekaterinburg, is a paradigm for how the so-called new Russians got their money. The combination of violence, parody of commercial business practice and straightforward corruption of every state institution from the legislature to the judiciary makes you laugh in disbelief. It should be compulsory reading for those who celebrate the arrival here of Roman Abramovich's billions, taking him into the bosom of London's titled glitterati as well as the hearts of Chelsea fans. How many destroyed lives in some freezing Siberian town now pay Frank Lampard's weekly wage?

We should all be ashamed as we read the other stories of the brave and the honest who have no recourse to anyone. Politkovskaya has withering contempt for a president who does nothing to attempt to protect his citizens unless it directly impacts on his own control of power.

As befits a former FT journalist, David Satter's book is more measured. But only marginally, and the impact is truly frightening. He covers much of the same ground as Politkovskaya in story after story of the degradation of the Russian state over the past 13 years. But the most devastating accusation, which lies at the heart of this book and is repeated more than once, is that in 1999 President Putin, or at least his backers, deliberately blew up hundreds of their fellow citizens in their beds in order to get elected.

This has long been a rumour (in fact a documentary was made about it), but the rational temptation has been to write it off as a conspiracy theory mixed in with Chechen propaganda. As Satter tells it, Yeltsin, his new prime minister Putin and the "oligarchs" who had made billions in their rape of Russia's wealth were running scared that their crimes were about to catch up with them. Suddenly, in the autumn of 1999, there was a coordinated sequence of bombings of residential blocks in Moscow, Buinaksk and Volgodonsk, which killed hundreds. The explosions were immediately blamed on Chechens and provided justification for launching the second Chechen war that December. Later the same month Yeltsin handed over power to Putin in return for immunity from prosecution for him and his family. Meanwhile the war provided the national purpose that enabled Putin to win the elections that followed.

There is no direct proof that these explosions were the work of the FSB except that they were very professionally done, used an explosive that was produced exclusively by the FSB, and that the targets - working-class blocks of flats - made little sense. As Satter says, "the key lies... in Ryazan", a provincial town just south of Moscow. This was the bomb that did not go off. One night vigilant residents in a block of flats caught FSB agents planting a bomb using the same type of explosives in exactly the same way as the earlier explosions. Initially the FSB denied any involvement. Eventually they had to admit their presence but maintained that "it was a training exercise". This makes no sense. The explosives, the detonator, everything was real. Satter writes that the "evidence that the operation in Ryazan was not an exercise... is nothing short of overwhelming".

What an accusation. How does it make us look at the theatre siege and the atrocity in Beslan? How should we treat the Russian president's appeal that the war in Chechnya is part of the global war on terror? And what of Putin's role in the Ukrainian elections? The terrifying thing is that these are not the most depressing questions that Satter poses in his book.

His final chapter is called "Does Russia Have a Future?" in which he suggests that, for all the surface economic improvement caused by the oil price, Russia faces questions about its long-term survival. Both these books underline the moral vacuum that the destruction of the Soviet Union has left. There are no values to believe in except theft. Satter connects this to perhaps the most serious problem, depopulation. Russia has one of the lowest birth rates in the world and the death rate of a country at war. The capitalist shock therapy of the early 90s caused a huge increase in the death rate. Some of it was caused by poverty, some by alcoholism. But Satter quotes the head of Russia's State Centre for Prophylactic Medicine as saying that the critical reason was "the spiritual condition of the Russian people" and the failure of the new society to provide a new purpose after the fall of communism.

This sounds outlandish. But having entered the nightmare world of these two books you are prepared to believe it. There are no values, no laws, no structures for people to turn to, and, critically, nothing and nobody left to believe in.

· Angus Macqueen's documentary series Cocaine will be on Channel 4 in January.